[Federal Register Volume 89, Number 32 (Thursday, February 15, 2024)]
[Proposed Rules]
[Pages 11773-11788]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2024-02961]


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Proposed Rules
                                                Federal Register
________________________________________________________________________

This section of the FEDERAL REGISTER contains notices to the public of 
the proposed issuance of rules and regulations. The purpose of these 
notices is to give interested persons an opportunity to participate in 
the rule making prior to the adoption of the final rules.

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Federal Register / Vol. 89, No. 32 / Thursday, February 15, 2024 / 
Proposed Rules

[[Page 11773]]



SOCIAL SECURITY ADMINISTRATION

20 CFR Parts 404, 416, and 422

[Docket No. SSA-2016-0039]
RIN 0960-AH88


Use of Electronic Payroll Data To Improve Program Administration

AGENCY: Social Security Administration.

ACTION: Notice of proposed rulemaking.

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SUMMARY: Section 824 of the Bipartisan Budget Act of 2015 (BBA) 
authorizes the Commissioner of Social Security to enter into 
information exchanges with payroll data providers to obtain wage and 
employment information. We use wage and employment information to 
administer the Old-Age, Survivors, and Disability Insurance (OASDI) 
disability and Supplemental Security Income (SSI) programs under titles 
II and XVI of the Social Security Act (Act). We are proposing these 
rules pursuant to section 824 of the BBA, which requires us to 
prescribe, by regulation, procedures for implementing the access to and 
use of the information held by payroll data providers. We expect these 
proposed rules will support proper use of information exchanges with 
payroll data providers that will help us administer our programs more 
efficiently and prevent improper payments under titles II and XVI of 
the Act, which can otherwise occur when we do not receive timely and 
accurate wage and employment information.

DATES: To ensure that your comments are considered, we must receive 
them no later than April 15, 2024.

ADDRESSES: You may submit comments by any one of three methods--
internet, fax, or mail. Do not submit the same comments multiple times 
or by more than one method. Regardless of which method you choose, 
please state that your comments refer to Docket No. SSA-2016-0039 so 
that we may associate your comments with the correct rule.
    Caution: You should be careful to include in your comments only 
information that you wish to make publicly available. We strongly urge 
you not to include in your comments any personal information, such as 
Social Security numbers or medical information.
    1. Internet: We strongly recommend that you submit your comments 
via the internet. Please visit the Federal eRulemaking portal at 
https://www.regulations.gov. Use the Search function to find docket 
number SSA-2016-0039. The system will issue a tracking number to 
confirm your submission. You will not be able to view your comment 
immediately because we must post each comment manually. It may take up 
to a week for your comment to be viewable.
    2. Fax: Fax comments to 1-833-410-1631.
    3. Mail: Mail your comments to the Office of Legislation and 
Congressional Affairs, Regulations and Reports Clearance Staff, Social 
Security Administration, Mail Stop 3253 Altmeyer, 6401 Security 
Boulevard, Baltimore, Maryland 21235-6401.
    Comments are available for public viewing on the Federal 
eRulemaking portal at https://www.regulations.gov or in person, during 
regular business hours, by arranging with the contact person identified 
below.

FOR FURTHER INFORMATION CONTACT: Nicole Dunham, Policy Analyst, Office 
of Supplemental Security Income and Program Integrity Policy, Social 
Security Administration, 6401 Security Boulevard, Baltimore, Maryland 
21235-6401, (410) 966-9078. For information on eligibility or filing 
for benefits, call our national toll-free number, 1-800-772-1213, or 
TTY 1-800-325-0778, or visit our internet site, Social Security Online, 
at https://www.socialsecurity.gov.

SUPPLEMENTARY INFORMATION:

Background

    We administer the OASDI disability and SSI programs under titles II 
and XVI of the Act, respectively. The OASDI program pays benefits to 
individuals who meet certain requirements, including those who are 
disabled and insured for disability.\1\ OASDI also pays benefits to 
certain members of disabled individuals' families.\2\ We refer to 
meeting the requirements for OASDI disability benefits as OASDI 
disability ``entitlement.'' The SSI program provides financial support 
to: (1) adults and children with a disability or blindness; and (2) 
adults aged 65 and older. These individuals must meet all program 
eligibility requirements, including having resources and income below 
specified amounts.\3\ We refer to meeting the factors of eligibility 
for SSI payments as SSI ``eligibility.''
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    \1\ See 20 CFR 404.315 for a full list of the OASDI disability 
eligibility requirements.
    \2\ This can include, for example, a child of the disabled 
individual, a child of the disabled individual entitled to an adult 
child disability benefit, a spouse caring for a minor or disabled 
child of the disabled individual, or retirement benefits for a 
spouse age 62 or older of the disabled individual. See 20 CFR 
404.330, 404.350, 404.351.
    \3\ See 20 CFR 416.202 for a full list of the SSI eligibility 
requirements.
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    We take seriously our responsibilities to ensure eligible 
individuals receive the benefits to which they are entitled and to 
safeguard the integrity of benefit programs to better serve our 
customers. Our commitment includes working to ensure we have accurate 
wage data as quickly as practicable to avoid overpayments before they 
occur or correct them quickly.
    We use wage and employment information to decide who can receive 
OASDI disability benefits and SSI payments. We also use it to determine 
SSI payment amounts. Receiving complete, accurate, and timely wage and 
employment information allows us to administer our programs efficiently 
and to avoid improper payments that can occur when we do not have such 
information. Reviews of post-entitlement cases show that substantial 
gainful activity (SGA) \4\ continues to be the leading cause of 
overpayments in the OASDI disability program. In fact, SGA-related 
overpayments in the OASDI program averaged approximately $500 million 
annually as of fiscal year 2022.\5\ Further, wage discrepancies,

[[Page 11774]]

which reached an annual average of approximately $1.4 billion in 
improper payments as of fiscal year 2022, have been a leading cause of 
improper payments in the SSI program for more than a decade.\6\
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    \4\ A requirement for disability for both OASDI disability and 
SSI is that you cannot be engaged in SGA, which is defined as work 
that involves significant and productive physical or mental duties, 
and is done, or intended to be done, for pay or profit. 20 CFR 
404.1510, 404.1520(b), 416.910, 416.920(b).
    \5\ FY2023 Agency Financial Report, page 180, available at 
https://www.ssa.gov/finance/2023/Full%20FY%202023%20AFR.pdf. 
Beneficiaries' failure to report earnings in a timely manner 
accounted for 82 percent of SGA-related improper payments and our 
failure to take the proper actions to process work reports accounted 
for the remainder.
    \6\ Id. at 184 and 185. Wage discrepancies occur when the 
recipient or their deemor has actual wages that differ from the wage 
amount we used to calculate the SSI payment, either because the 
recipient failed to report a change, or we failed to make changes to 
payments in a timely manner.
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    Currently, we rely on individuals to report certain wage and 
employment information to us. Individuals who are entitled to OASDI 
disability must report to us when their condition improves, when they 
return to work, when they increase the amount they work, and when their 
earnings increase.\7\ Individuals who are eligible for SSI based on 
disability or blindness must make similar reports.\8\ All SSI 
recipients and deemors \9\ must also report to us any change in income 
\10\ as soon as a reportable event happens.\11\ For OASDI disability 
and SSI, they can report these changes by phone, fax, mail, in 
person,\12\ or by using mySocialSecurity. In many cases, SSI recipients 
may also report wages through the SSA Mobile Wage Reporting (SSAMWR) 
application and the SSI Telephone Wage Reporting (SSITWR) system. We 
may also request this information from the employer(s) or payroll data 
providers when the information we receive is incomplete or we are 
unable to obtain it from the individual. Because many individuals work 
in jobs where earnings may vary from week to week, some individuals 
report these changes to us each month or more frequently. In FY 2022, 
we received 1.1 million wage reports \13\ for individuals who received 
OASDI disability or OASDI disability and SSI concurrently, and who were 
in current pay status (this does not include SSI only wage reports). 
Though we strive to make reporting as easy as possible, individuals 
must keep track of their reportable events, report them as soon as they 
happen, and spend time making the reports, which can be burdensome.\14\ 
We estimate that there are about 1,100,000 OASDI disability 
beneficiaries, between 200,000 and 300,000 SSI recipients, and another 
500,000 to 600,000 deemors of SSI recipients who work in a given year. 
Despite the many reporting options, we do not always receive complete 
or timely reports. Even when we receive complete reports, we may still 
need to verify them with independent or collateral sources when we do 
not have proper wage evidence to verify the report, such as a paystub. 
Currently, to verify wage reports, we conduct a manual query, 
requesting records from payroll data providers, and sometimes 
employers, on a case-by-case basis. This is time-consuming, prolongs 
the resolution of the case, and adds to our workloads. An automated 
information exchange would allow us to obtain this information more 
efficiently because it could automatically process large numbers of 
queries at once.
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    \7\ See 20 CFR 404.1588(a). We require reporting an increase in 
work or earnings because that may indicate the beneficiary has 
performed SGA (see 20 CFR 404.1572 and 404.1574) and will no longer 
be entitled to an OASDI disability benefit (20 CFR 404.1520(b)).
    \8\ See 20 CFR 416.988. As with OASDI disability, we require 
these reports because they may indicate SGA (see 20 CFR 972 and 
416.974), which may affect SSI eligibility (20 CFR 416.920(b)).
    \9\ A deemor is any person whose income or resources are 
material to determining the eligibility of someone filing for or 
receiving SSI. 20 CFR 416.1160; SI 01310.127.
    \10\ See 20 CFR 416.708(c). Income in our SSI regulations is a 
broad term that includes ``anything you receive in cash or in kind 
that you can use to meet your daily needs for food and shelter.'' 
See 20 CFR 416.1102. One type of income is wages, which are divided 
into two categories: wages paid in cash and wages paid in kind. See 
20 CFR 416.1110. Wages paid in cash may include salaries, 
commissions, bonuses, severance pay, and any other special payments 
received because of employment. Id.
    \11\ See 20 CFR 416.714.
    \12\ When we receive reports by phone, fax, mail, or in person, 
our technicians process them manually. Manual processing by 
technicians includes calculating the total wage amount for the 
month, posting the amount to the record, and providing a receipt to 
the customer. Electronic methods of reporting accept wage reports on 
any day during the reporting month. Wage reports submitted by 
electronic methods are automatically posted to the record and the 
payment is adjusted accordingly.
    \13\ A ``wage report'' is anytime SSA becomes aware of wages, 
whether through self-reporting (mail, fax, office visit, or a self-
report through an electronic method), third party data provider, IRS 
annual wage data, or State reported wage data.
    \14\ To be considered in time to process a particular month's 
payment, SSI recipients or their representative payees must report 
income changes within the first ten days of the month following the 
month of change (20 CFR 416.714). Receiving this information earlier 
in the month allows us more time to calculate the correct payment, 
send a Notice of Planned Action (NOPA) when an adverse action 
applies, and adjust benefits for the following month. If a change is 
reported after the first ten days of the month and the change 
results in a change in the recipient's payment amount, then it is 
likely that we will not be able to adjust benefits for the following 
month, resulting in an overpayment or underpayment.
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    As we discuss later in this proposed rule, when individuals become 
eligible for reduced reporting responsibilities, we would no longer 
burden them with frequent reporting of certain wage information. They 
would no longer need to keep track of certain reportable events, report 
them as soon as they happen, and spend time making the reports. 
Further, we would no longer need to burden employers with requests for 
this information. As discussed in the regulatory analysis section, we 
project that identifying overpayments more quickly will reduce the 
quantity and size of overpayments, benefitting both recipients and 
employers, and better fulfill our stewardship obligations.

Section 824 of the BBA and the Proposed Automated Process

    Section 824 of the BBA \15\ authorizes the Commissioner of Social 
Security to enter into information exchanges with payroll data 
providers \16\ to obtain wage and employment information. It authorizes 
these information exchanges for the purposes of efficient program 
administration and to prevent improper OASDI disability and SSI 
payments \17\ without the need for verification by independent or 
collateral sources.\18\ Section 824 adds a new section 1184 to the Act 
and also adds language to sections 225 and 1631(e) of the Act \19\ to 
clarify the role that information exchanges will play in determining 
payment amount and making eligibility and entitlement determinations 
and decisions for the OASDI disability and SSI programs.
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    \15\ Public Law 114-74, 129 Stat. 584, 607.
    \16\ ``Payroll data providers'' include payroll providers, wage 
verification companies, and other commercial or non-commercial 
entities that collect and maintain information regarding employment 
and wages. 42 U.S.C. 1320e-3(c)(1).
    \17\ Under 42 U.S.C. 1320e-3(a)(1) the information exchange is 
limited to disability insurance beneficiaries (those under 
subsections (d)(1)(B)(ii), (d)(6)(A)(ii), (d)(6)(B), (e)(1)(B)(ii), 
and (f)(1)(B)(ii) of section 202 and subsection (a)(1) of section 
223) and supplemental security income benefits under title XVI. The 
law does not allow us to use the information exchange to obtain wage 
information for other beneficiaries under Title II (e.g., 
individuals who continue to work while receiving old-age benefits).
    \18\ 42 U.S.C. 1320e-3(a). ``Information exchanges'' are the 
automated comparison of our system(s) of records with information of 
payroll data providers. 42 U.S.C.. 1320e-3(c)(2).
    \19\ 42 U.S.C. 425, 1320e-3, and 1383(e).
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    As discussed above, we require wage and employment information to 
administer the OASDI disability and SSI programs. An information 
exchange would allow us to automate the process of obtaining and 
recording the wage and employment data we receive from a payroll data 
provider through the information exchange to the appropriate OASDI 
disability and SSI systems records.\20\ We will use this information

[[Page 11775]]

to efficiently administer OASDI and SSI benefits, including adjusting 
payment amounts and making entitlement or eligibility determinations 
for the OASDI disability and SSI programs based on the information we 
receive from a payroll data provider. We will also use this information 
to avoid making improper payments of those benefits.
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    \20\ Implementation of the information exchange will not affect 
our quarterly data-matches with the National Directory of New Hires 
(NDNH) or our annual match with the Master Earnings File, both which 
supply us with limited wage data. The NDNH is a federally mandated 
national repository of employment, unemployment insurance, and 
quarterly wage information submitted by state directories of new 
hires, state workforce agencies, and Federal employers. The Master 
Earnings File contains data derived from IRS Form W-2, quarterly 
earnings records, and annual income tax forms. These data include 
regular wages and salaries, tips, self-employment income, and 
deferred compensation (contributions or distributions).
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Advantages of Using Information Exchanges With Payroll Data Providers

    We expect that receiving monthly wage and employment information 
for our claimants, beneficiaries, recipients, and deemors \21\ 
automatically through an information exchange with a payroll data 
provider who provides sufficiently accurate, up-to-date, and complete 
information will improve payment accuracy. It will also reduce improper 
payments that occur when we do not receive wage or employment reports 
timely (although, as indicated in the E.O. 12866 analysis section, we 
do not estimate the reduction in improper payments). Further, this 
process would reduce the burden of self-reporting on individuals who 
authorize us to obtain wage and employment information from a 
participating payroll data provider and we receive their wage and 
employment information from their employer through an information 
exchange. Additionally, individuals who provide authorization would not 
be subject to certain penalties under section 1129A of the Act \22\ for 
any omission or error with respect to wages reported by a participating 
payroll data provider (in FY 2022 we performed 54 cases of 
administrative sanctions in the SSI program and 82 administrative 
sanctions in the Social Security Disability Insurance (SSDI) program; 
in FY 2023 it was 59 cases and 24 cases, respectively). We define a 
participating payroll data provider as a payroll data provider that has 
an information exchange arrangement with us to provide wage and 
employment information.
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    \21\ As explained above, a deemor is any person whose income or 
resources are material to determining the eligibility of someone 
filing for or receiving SSI. 20 CFR 416.1160; SI 01310.127.
    \22\ 42 U.S.C. 1320a-8a. See also 20 CFR 404.459 and 416.1340.
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    We anticipate that implementation of an information exchange would 
result in more efficient use of our limited administrative resources. 
If we receive wage and employment information through an information 
exchange with a participating payroll data provider, our technicians 
can reduce the amount of time spent manually requesting this 
information from payroll data providers and employers, manually 
entering data into our systems from an individual's pay records, 
contacting individuals, and assisting individuals with the results of 
incomplete or untimely reporting.

Solicitation for Payroll Data Provider

    In May 2019, we solicited proposals for payroll providers using 
full and open competition in accordance with Federal Acquisition 
Regulations (FAR) Part 15. As stated in our solicitation, we based our 
award decision on a trade-off process (best value), considering both 
price and non-price factors.\23\
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    \23\ In accordance with FAR Subpart 15.101-1(a), a trade-off 
process is appropriate when it may be in the best interest of the 
Government to consider award to other than the lowest priced offeror 
or other than the highest rated offeror. The non-price factors 
(listed in descending order of importance) used were: 1. Technical 
approach, 2. Corporate experience, and 3. Past performance. The 
solicitation stated factors 1, 2, and 3 when combined were 
approximately equal in importance to price.
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    Equifax Workforce Solutions (Equifax) was the only payroll provider 
to respond to our solicitation. We evaluated the proposal against the 
evaluation criteria listed above, which consisted of technical 
approach, corporate experience, past performance, and price. The 
Technical Evaluation Committee \24\ determined the Non-Price Proposal 
to be acceptable and assigned favorable ratings for the three non-price 
factors. The Contracting Officer evaluated the Business Proposal (i.e., 
price proposal) and determined the proposed prices were fair and 
reasonable according to FAR 15.404-1(b) and the terms of the 
solicitation. In September 2019, the agency awarded the Payroll 
Information Exchange contract to Equifax, as we determined Equifax 
offered the best value to the government, all factors considered.\25\
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    \24\ The Technical Evaluation Committee supports the source 
selection for the acquisition. It is typically comprised of no more 
than three individuals with the appropriate technical expertise to 
evaluate proposals in accordance with the solicited evaluation 
factors.
    \25\ We published notice of our information exchange with 
Equifax, pursuant to section 824 of the BBA, on January 19, 2021. 86 
FR 5303.
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Accuracy Study

    We conducted an accuracy study \26\ of data we received from 
Equifax through a database known as The Work Number.\27\ Equifax 
reports that The Work Number covers over two-thirds of non-farm 
payroll, although neither SSA nor Equifax has analyzed whether working 
disability benefit recipients are represented in a similar proportion 
in the database. This study compared wage and employment information we 
received from Equifax to wage and employment information we obtained 
from paystubs that users uploaded to the SSAMWR application, an online 
wage reporting tool currently available to SSI recipients, deemors, and 
their representative payees. We identified about 40,000 samples from 
March 2022 through September 2022 where both Equifax and SSAMWR had 
information on the same paystub for the same employee, employer, and 
time period.\28\ We then compared the information that Equifax and 
SSAMWR had for these paystubs using the following four variables: pay 
period start date, pay period end date, pay date, and gross earnings 
amount.
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    \26\ The study, ``Evaluation of Payroll Information Exchange 
(PIE) Wage Data Accuracy,'' is available in the rulemaking record at 
www.regulations.gov as a supporting document for Docket SSA-2016-
0039.
    \27\ We performed a limited period of exchanges through 
September 2022 with Equifax. We used this data to test systems we 
created to receive, interpret, and incorporate the data Equifax 
sent. We were also able to use this data to perform this accuracy 
study.
    \28\ The sampling choices limit the types of conclusions that 
can be drawn about the accuracy of Equifax's data across the entire 
covered population. For example, if Equifax reports payroll 
information on an individual who was not working during a pay 
period, such an error would lower the true accuracy of using the 
Equifax database but would not be identified in this study.
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    We evaluated the accuracy through two steps. First, we matched 
seven months of information exchange records to SSAMWR based on SSN and 
pay periods as identified by the variables pay period start date, pay 
period end date, and pay date. Of the roughly 40,000 records with SSNs 
in both datasets, we found that 80.43% exactly matched both gross 
earning and all date fields. In 13.35% of the cases all dates matched 
but gross earnings did not. In the remainder of the cases there were 
iterations of partial earnings matches but with inaccurate dates.
    To study the cause of the 7,976 cases with matching errors, our 
second step was to randomly sample 4% (341) and manually review the 
cases. We first found that a large source of gross earnings match 
errors between information exchange data and SSAMWR were due to optical 
scanning inaccuracies from our SSAMWR file compared with the actual 
photo of the paystub the beneficiary had uploaded to SSAMWR. To further 
determine the accuracy of information exchange-reported data, we 
compared the information exchange data against actual images of the 
paystubs which

[[Page 11776]]

were submitted in SSAMWR. Through this process, we determined that in 
77.4% of the sampled cases,\29\ all dates and gross earnings matched 
between the information exchange and the true paystub.
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    \29\ The 95 percent confidence interval for this estimate had a 
lower bound of 73.0 percent and an upper bound of 81.8 percent.
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    By extrapolating this sample to the broader set of 7,976 cases 
where there were initial mismatches between information exchange 
records and SSAMWR, we concluded that in 95.6 percent \30\ of the 
original roughly 40,000 cases, all four variables matched between the 
actual paystub and the information exchange record. Although some data 
differed in 4.4 percent of these cases between Equifax and SSAMWR, the 
study did not determine whether the differences would have affected our 
benefit determinations. For example, one of the pay period variables we 
evaluated, pay period start date, would have no discernable impact on 
benefit determinations.\31\ While some other variable inconsistencies 
likewise may have had little or no impact on benefit determinations, 
potential errors related to total pay (such as over- or under-reporting 
actual income) could result in us initiating an action to change 
benefit amount.\32\
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    \30\ The 95 percent confidence interval for this estimate had a 
lower bound of 94.7 percent and an upper bound of 96.5 percent.
    \31\ The pay period start date obtained through this exchange is 
not used for benefit determinations. For OASDI disability 
determinations, we use pay period end date, gross earnings, and 
sometimes pay date. For SSI determinations, we use only the pay date 
and gross earnings. When we removed the pay period start date 
variable from the study data, the match rate increased from 95.6 
percent to 97.1 percent.
    \32\ Regarding the sample of cases that did not match on gross 
earnings, representing roughly half of the 4.4 percent of mismatched 
data, the study did not determine, for example, whether the mismatch 
in gross earnings was a significant difference that would result in 
an incorrect benefit determination. Mismatched earnings may not 
impact benefit eligibility or amounts if the earnings are below 
relevant thresholds or not relevant to the calculation based on when 
they are paid (for SSI) or earned (for OASDI disability). The study 
did not determine how mismatched cases impacted benefit 
determinations. Also, the study only looked at single instances of 
paystubs and not the full monthly earnings amount. Therefore, the 
study was unable to determine the true impact of those inaccuracies.
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    Based on the results of this accuracy study, we are confident the 
information exchange will supply the accurate wage and employment 
information we need to make benefit determinations in most 
circumstances.

Requirements of Section 824 of the BBA

    Section 824(d) of the BBA \33\ requires us to publish regulations 
prescribing procedures for implementing the access and use of the 
information held by payroll data providers, including: (1) guidelines 
for establishing and maintaining information exchanges with payroll 
data providers, pursuant to section 1184 of the Act; (2) beneficiary 
authorizations; (3) reduced wage reporting responsibilities for 
individuals when they authorize us to access information held by 
payroll data providers through an information exchange; and (4) 
procedures for notifying individuals in writing when they become 
subject to such reduced wage reporting requirements and when such 
reduced wage reporting requirements no longer apply to them. We discuss 
each of these four items below.
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    \33\ Public Law 114-74, 129 Stat. 584, 610.
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1. Guidelines for Establishing and Maintaining Information Exchanges 
With Payroll Data Providers

    As discussed above, we need wage and employment information to 
decide who can receive OASDI disability benefits and SSI payments and 
to determine SSI payment amounts.\34\ Although individuals are required 
to report this information to us, they do not always report it to us 
timely or provide complete information. As required by section 824 of 
the BBA, we propose to prescribe guidelines for establishing and 
maintaining an information exchange.
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    \34\ Section 824 of the BBA also permits us to obtain wage and 
employment information from a participating payroll data provider 
for the purpose of making OASDI disability benefit amount 
determinations. 42 U.S.C. 1320e-3(b)(1)(A). Currently, we do not use 
wage and employment information from a payroll data provider for 
OASDI disability benefit amount determinations.
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    To establish an information exchange, we will identify the payroll 
data providers (as defined in proposed Sec. Sec.  404.702 and 416.702) 
that may be interested in participating in an information exchange with 
us. Before we establish an information exchange with a payroll data 
provider, we will consider such factors as the provider's ability and 
willingness to: engage in an information exchange; provide us with wage 
and employment information that includes all necessary data elements 
needed to make program determinations and payment amount decisions; and 
provide data that is sufficiently accurate,\35\ complete,\36\ and up-
to-date.\37\ We will also consider and evaluate any conditions and 
limitations associated with our receipt of the data.
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    \35\ By ``accurate'' we mean that the exchange supplies the 
correct wage and employment information received for the requested 
individual.
    \36\ By ``complete'' we mean the wage and employment information 
received from the participating payroll data provider contains all 
the required data elements necessary for us to make determinations 
and decisions regarding entitlement under title II of the Act. and 
eligibility and payment amounts under title XVI of the Act. We note 
that, in cases in which our current participating payroll data 
provider cannot supply all the wage and employment information we 
require to make benefit determinations, we investigate further to 
gather additional information.
    \37\ By ``up-to-date'' we mean the latest wage and employment 
information received from the payroll data provider each month. For 
example, our current participating payroll data provider makes wage 
and employment information available within 24 hours of receipt from 
employers.
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    Any arrangement with a selected payroll data provider will 
describe: the records to be matched; the procedure for conducting the 
match; any requirements established relating to ensuring records are 
accurate, complete, and up-to-date; procedures for ensuring the 
administrative, technical, and physical security of the records 
matched; and such other provisions as are necessary. Further, before we 
enter into an information exchange,\38\ we will publish a notice in the 
Federal Register describing the information exchange,\39\ including our 
assessment that the information received through the exchange is 
relevant and necessary to administer our programs and an explanation 
for why the information is sufficiently accurate, complete, and up-to-
date. Receiving accurate, complete, and up-to-date, information from an 
information exchange is necessary to allow us to decide claims earlier 
and avoid improper payments that may arise from untimely, incomplete, 
or missing wage and employment reports.
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    \38\ We have interpreted this to mean before implementing an 
information exchange by data sharing, which would occur after 
establishing an arrangement with a payroll data provider (e.g., 
contract) to develop the exchange.
    \39\ On January 19, 2021, we published a notice in the Federal 
Register that provided advance notification to the public regarding 
an information exchange we established with Equifax (86 FR 5303). To 
date, that is the only information exchange we have established 
under section 824 of the BBA.
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    Once we enter into an information exchange with a payroll data 
provider, we will maintain the information exchange by periodically 
assessing whether the data we receive continues to be accurate, 
complete, and up-to-date. We will also monitor compliance with the 
requirements of the information exchange.

2. Beneficiary Authorizations

    When an individual applies for benefits under OASDI disability or 
SSI, we will request authorization from the individual to obtain their 
wage and employment information from a payroll data provider.\40\ We 
will also ask for

[[Page 11777]]

authorization during other post-entitlement events, such as a 
redetermination for SSI. Although we have not started using payroll 
data, in anticipation of implementing the information exchange, we 
began collecting authorizations in late 2017 (which we currently 
collect via paper form or through attestation).\41\ In the future, we 
could accept authorization electronically. For OASDI disability, we 
request authorization from individuals who apply for or are entitled to 
benefits.\42\ For SSI, we request authorization from individuals who 
apply for or receive SSI, as well as deemors, ineligible children, and 
individuals who turn age 18.\43\ An authorization applies to all 
pending and approved claims under the specific program until the 
authorization is revoked or terminated.
---------------------------------------------------------------------------

    \40\ The law allows SSA to require the authorization. SSA has 
decided that we will request this authorization on a voluntary 
basis, and that there will be no automatic assumption of inclusion 
without obtaining prior authorization. Under the law, individuals 
may refuse to provide this authorization and may revoke it. We will 
follow the BBA 824 requirements about the specific information to be 
provided with the authorization.
    \41\ Attestation is the action taken by an SSA employee of 
confirming and annotating on record the proper individual's intent 
to sign an SSA form.
    \42\ For OASDI disability, we request authorization at the 
initial claim, expedited reinstatement (EXR), and work continuing 
disability review (CDR) stages. When unsuccessful or if the 
individual is not available to provide authorization at the time we 
request it, we mail the paper SSA-8240 to the authorizing person, 
including a cover letter indicating the individual should complete, 
sign, and return the paper SSA-8240 form.
    \43\ For SSI, we request authorization at the full and deferred 
initial claims, and redetermination stages. We attempt to collect 
the authorization verbally and record it in our relevant system of 
record. When unsuccessful or if the individual is not available to 
provide authorization at the time we request it, we mail the paper 
SSA-8240 to the authorizing person, including a cover letter 
indicating the individual should complete, sign, and return the 
paper SSA-8240 form.
---------------------------------------------------------------------------

    When we request authorization, we explain the authorization's scope 
and duration. With regard to scope, we explain that we will use the 
authorization to obtain information from a payroll data provider to 
determine initial or ongoing entitlement to disability benefits for 
OASDI, as well as eligibility and payment amounts for SSI. We also 
explain that we may use the authorization for additional claims 
associated with the claim filed, such as an SSI claim by a spouse or 
child. In addition, we explain how we may use and disclose records 
obtained from payroll data providers consistent with applicable Federal 
law and any privacy notices we provide the individual. For example, we 
may use the individual's wage and employment information to decide 
whether they may be entitled to or eligible for benefits under both the 
OASDI disability and SSI programs, even if the individual's 
authorization was given for only one of those programs.
    With respect to the duration of an authorization, we inform 
individuals that the authorization remains in effect until the earliest 
of the following occurs:
    (a) the individual revokes their authorization in writing;
    (b) we terminate all entitlement(s) to benefits or eligibility for 
payments, there are no other claims or appeals pending, and all periods 
for appealing the determination or decision to terminate entitlement or 
eligibility have lapsed; \44\
---------------------------------------------------------------------------

    \44\ In cases with multiple claims, if one of the claims has an 
adverse determination or decision and the appeals period for that 
determination or decision has ended or the benefits terminate, we 
will no longer use the authorization for that specific claim. 
However, we will continue to use the authorization for all other 
current claims under the program for which the individual provided 
authorization and there is no other reason to end the authorization.
---------------------------------------------------------------------------

    (c) there has been an adverse determination or decision under the 
OASDI disability or SSI program, and, for that program, the individual 
is not otherwise currently entitled to benefits or eligible for 
payments, there are no other claims or appeals pending, and the period 
for appealing the adverse determination or decision has lapsed; or
    (d) for SSI deemors, the deeming relationship ends.\45\
---------------------------------------------------------------------------

    \45\ Additionally, if a parent or legal guardian gave us the 
initial authorization for an individual who is not a legally 
incompetent adult, the authorization will terminate when the 
individual turns 18 years of age. See, e.g., POMS SI 00515.001.C.
---------------------------------------------------------------------------

    Individuals may revoke their authorization in writing at any time. 
If they revoke their authorization, we will apply the revocation to all 
pending or approved claims under the OASDI disability and SSI programs 
from the time we process the revocation, including claims involving 
deemors. If the authorization is revoked, we will no longer request new 
information from payroll data providers for that individual.

3. Reduced Wage Reporting Responsibilities When Individuals Authorize 
Us To Access Information Held by Payroll Data Providers Through an 
Information Exchange

    Currently, if individuals become entitled to OASDI disability or 
eligible for SSI, they must report certain wage and employment 
information to us. We use this information to make program 
determinations. We expect that, once implemented, the information 
exchanges will help us reduce the wage reporting obligations of some 
individuals. Further explanation follows.
    Under section 824 of the BBA and these regulations, when 
individuals apply for or become entitled to a benefit based on 
disability under OASDI or any type of benefit under SSI and they 
authorize us to obtain information from payroll data providers, their 
reporting responsibilities may be reduced. The reduced wage reporting 
responsibilities depends on whether we receive their wage and 
employment information for their employer(s) through a participating 
payroll data provider. We will send a notice to individuals whenever 
their wage reporting responsibilities change, as discussed in the next 
section.
    Under our current rules, individuals who are entitled to OASDI 
disability must report to us when their condition improves, when they 
return to work, when they increase the amount they work, or if their 
earnings increase.\46\ There are many ways to do this. As mentioned 
above, individuals receiving OASDI disability can report changes in 
work activity by phone, fax, mail, in person, or online via their 
mySocialSecurity account. Under the proposed rules, we would require 
reporting only when their condition improves, they return to work, or 
they have a new employer. However, if individuals provide authorization 
and we receive their wage and employment information from their 
employer(s) through a participating payroll data provider, they would 
no longer have to report an increase in the amount of their work or an 
increase in their earnings with that employer, because we will obtain 
that information directly from the payroll data provider.
---------------------------------------------------------------------------

    \46\ 20 CFR 404.1588(a). We require reporting an increase in 
work or earnings because that may indicate that the beneficiary has 
performed substantial gainful activity (see 20 CFR 404.1572 and 
404.1574) and will no longer be entitled to an OASDI disability 
benefit (20 CFR 404.1520(b)).
---------------------------------------------------------------------------

    For SSI, wage reporting responsibilities may affect both 
eligibility and the payment amount. Individuals must report events that 
might change their disability or blindness status, including when their 
condition improves, when they return to work, when they increase the 
amount of their work, or when their earnings increase.\47\ To determine 
SSI eligibility and payment amount, we require individuals to report 
various events to us, among them any change in income \48\ and 
individuals must report to us as

[[Page 11778]]

soon as a reportable event happens.\49\ As mentioned above, individuals 
receiving SSI can report changes in work activity by phone, fax, mail, 
in person, online via their mySocialSecurity account, or by using 
SSAMWR or SSITWR. However, if individuals provide authorization and we 
receive their wage and employment information from their employer(s) 
through a participating payroll data provider, they will no longer have 
to report an increase in the amount of their work for that employer, an 
increase in earnings from that employer, or changes to wages paid in 
cash \50\ from that employer, because we will obtain that information 
directly from the payroll data provider. All other reporting 
obligations apply, as detailed in the chart.
---------------------------------------------------------------------------

    \47\ See 20 CFR 416.988.
    \48\ See 20 CFR 416.708(c).
    \49\ See 20 CFR 416.714.
    \50\ By ``wages paid in cash'' we are referring to wages paid in 
money or its equivalent, as opposed to wages paid ``in kind,'' which 
refers to the value of food, clothing, shelter, or other items 
provided as wages instead of cash. See 20 CFR 416.1110.

----------------------------------------------------------------------------------------------------------------
                                                                             Reporting responsibilities under
                                                                           proposed regulations when we receive
            Program                 Reporting responsibilities under      wage and employment information for an
                                          current regulations                employer through a payroll data
                                                                                         provider
----------------------------------------------------------------------------------------------------------------
OASDI disability..............  Individuals must report to us when:      Individuals must report to us when:
                                   <bullet> their condition improves:       <bullet> their condition improves;
                                   <bullet> they return to work;            <bullet> they return to work; or
                                   <bullet> they increase the amount        <bullet> they have a new employer.
                                    they work; or
                                   <bullet> their earnings increase.
SSI...........................  Individuals must report to us any        Individuals no longer have to report
                                 change in income as soon as a            changes to wages paid in cash.
                                 reportable event happens.
                                They must also report to us when:        They must report to us when:
                                <bullet> their condition improves;       <bullet> their condition improves;
                                <bullet> they return to work;            <bullet> they return to work; or
                                <bullet> they increase the amount they   <bullet> they have a new employer.
                                 work; or
                                <bullet> their earnings increase.
                                See Sec.   416.708 for additional        See Sec.   416.708 for additional
                                 reporting requirements.                  reporting requirements.
----------------------------------------------------------------------------------------------------------------

    In addition to the reduced wage reporting responsibilities 
described above, individuals may not be subject to certain penalties 
related to reporting if they authorize us to obtain information from a 
payroll data provider. Individuals who authorize us to obtain wage and 
employment information from a payroll data provider will not be subject 
to penalties under section 1129A of the Act for omissions or errors in 
the data we receive from a participating payroll data provider, 
excluding situations where there may be fraud or similar fault.\51\
---------------------------------------------------------------------------

    \51\ 42 U.S.C. 1320a-8a. See 20 CFR 404.459, 416.1340. The 
relevant penalty under section 1129A of the Act and 20 CFR 404.459, 
416.1340 is the non-payment of OASDI disability benefits and 
ineligibility for SSI cash benefits. Other penalties under section 
1129A of the Act may apply in situations involving false or 
misleading statements, including statements regarding wages and 
employment.
---------------------------------------------------------------------------

    Further, if individuals report changes in income late or not at all 
in connection with SSI payments, they may be subject to penalties under 
section 1631(e)(2) of the Act, unless they have good cause for the 
failure to report timely.\52\ In cases in which an individual has 
authorized us to obtain information from a payroll data provider, 
however, we will find good cause for a failure of, or delay by, an 
individual reporting a change in employer.\53\ In our notice of a 
change in reporting responsibilities, we will include any changes in 
penalty relief that may apply or when we may make the good cause 
finding described above.
---------------------------------------------------------------------------

    \52\ 42 U.S.C. 1383(e)(2). See 20 CFR 416.722 to 416.732. This 
penalty may be assessed for failure or delay in making certain 
reports to us.
    \53\ This comes directly from the BBA and we expect the intent 
was to provide additional relief from reporting obligations for SSI 
cases with authorizations. In section 824(c)(2)(B), the BBA added 
language to section 1631(e)(2)(B) of the Act clarifying that if 
someone authorizes, and there is a failure or delay to report a 
change in employer, SSA will find good cause for that failure or 
delay if ``the event or change in circumstance is a change in the 
individual's employer.'' We would anticipate receiving this 
information through the information exchange.
---------------------------------------------------------------------------

    Penalties that we may impose for failure to report are distinct 
from any attempts we may make to recover money that is improperly paid 
as a result of an overpayment. While individuals may not be subject to 
penalties for omissions or errors that may occur as a result of wage 
reporting, if we discover an overpayment, we will still attempt to 
recover any improperly paid funds. Although we do not propose it at 
this time, we are considering clarifying that for individuals who are 
exempt from reporting responsibilities because we get their wage and 
income information from a payroll data provider, any overpayments which 
result from inaccurate reporting of their income by the payroll data 
provider would be treated as an overpayment which they were ``without 
fault'' in causing under 20 CFR 404.507 (for OASDI) and 20 CFR 416.552 
(for SSI). While we still initially may seek recovery of an overpayment 
from an individual who is considered ``without fault'' in causing the 
overpayment, these individuals may request a waiver of the overpayment 
recovery which we may grant if, among other reasons, we determine that 
recovering the overpayment would either be ``against equity and good 
conscience'' or ``defeat the purpose'' of the program. Because one 
benefit of the payroll exchange is to facilitate the automatic 
transmission of wage data without the beneficiary manually reviewing 
and reporting this information to us, this alternative would provide an 
additional protection for participating beneficiaries against payroll 
inaccuracies. As discussed in the Solicitation for Public comment 
section below, prior to adopting this alternative policy we seek 
comments on if it would lower burdens for our beneficiaries or improve 
administrative efficiencies, other improvements we might consider 
related to addressing overpayments associated with workers who 
participate in the payroll exchange, as well as whether we should 
consider any other consequences of this alternative.

[[Page 11779]]



------------------------------------------------------------------------
                               Penalties under      Penalty relief when
          Program            current law affected        providing
                                  by the BBA           authorization
------------------------------------------------------------------------
OASDI disability..........  <bullet> Individuals   <bullet> Individuals
                             are subject to         are no longer
                             penalties for          subject to penalties
                             omissions or errors    under section 1129A
                             in wage and            for omissions or
                             employment             errors in wage and
                             information under      employment
                             section 1129A.         information that we
                                                    receive from a
                                                    payroll data
                                                    provider through an
                                                    information
                                                    exchange.
SSI.......................  <bullet> Individuals   <bullet> Individuals
                             are subject to         are no longer
                             penalties for          subject to penalties
                             omissions or errors    under section 1129A
                             in wage and            for omissions or
                             employment             errors in wage and
                             information under      employment
                             section 1129A.         information that we
                            <bullet> We may         receive from a
                             impose a penalty       payroll data
                             under section          provider through an
                             1631(e)(2) of the      information
                             Act for a failure or   exchange.
                             delay in reporting    <bullet> We will find
                             certain events or      good cause for a
                             changes in             failure of, or delay
                             circumstances          by, an individual
                             relevant to SSI        reporting a change
                             eligibility or         in employer. This
                             payment amount         means the penalty
                             unless the             would not apply.
                             individual can show
                             good cause for the
                             failure or delay.
------------------------------------------------------------------------

4. Procedures for Notifying Individuals in Writing When They Become 
Subject to Reduced or Increased Wage Reporting Requirements and When 
Penalty Relief Applies

    We will notify individuals in writing of changes in their reporting 
responsibilities whenever we start or stop receiving their wage and 
employment information from a payroll data provider through an 
information exchange. We also explain whether they may be subject to 
penalties under section 1129A of the Act at the time they provide 
authorization.\54\ If they receive SSI, we will also explain when we 
will find good cause for a failure or delay in reporting a change in 
employer under section 1631(e)(2) of the Act.
---------------------------------------------------------------------------

    \54\ There are certain instances where an individual may be 
subject to penalties even though they have authorized the use of an 
information exchange. For example, if an individual authorizes the 
use of an information exchange but their employer does not actually 
participate in one, they may be subject to penalties for failure to 
report their income. As another example, if an individual's employer 
participates in the information exchange but the individual fails to 
report a separate stream of self-employment income, they may be 
subject to penalties for failure to report their income.
---------------------------------------------------------------------------

    As discussed above, if individuals authorize us to obtain 
information from a payroll data provider, and we receive their wage and 
employment information for their employer(s) through a participating 
payroll data provider, they will not have to report, for that employer, 
changes in earnings for OASDI disability and SSI or wages paid in cash 
for SSI. This will continue for as long as we continue to receive this 
information through a participating payroll data provider for that 
employer, and we will send a notice to the individual informing them of 
the change to their reporting responsibilities. We will also send 
notices whenever we start and stop receiving information about their 
employer and their reporting responsibilities change. All other 
reporting requirements will still apply.
    If individuals work multiple jobs, they will not have to report an 
increase in earnings for OASDI disability and SSI or wages paid in cash 
for SSI from any employer(s) whose wage and employment information we 
receive from a participating payroll data provider, as long as we 
continue to receive this information through a participating payroll 
data provider for that employer(s). We will send a notice \55\ to the 
individual informing them of any change to their reporting 
responsibilities. When an individual gives us authorization to obtain 
their wage and employment information from a payroll data provider, we 
promptly issue them a receipt that includes the scope and duration of 
their authorization and explains their wage reporting responsibilities 
related to the information exchange. This receipt explains they are 
required to continue to report their wage and employment information to 
us until they receive a specific notice telling them that they no 
longer must report. The notice will identify the employer(s) for whom 
the individual will not need to report wage and employment information 
to us. Individuals must still report an increase in earnings for OASDI 
disability and SSI and wages paid in cash for SSI from any employer(s) 
whose wage and employment information we do not receive through a 
participating payroll data provider. They must also tell us if they 
have a new employer.
---------------------------------------------------------------------------

    \55\ Following publication of this proposed rule, we will submit 
to OMB a request for a revision to an existing information 
collection under the Paperwork Reduction Act (5 CFR 1320.11).
---------------------------------------------------------------------------

    If individuals revoke their authorization, we will notify them in 
writing to explain that all reporting responsibilities apply and that 
penalties relating to reporting may apply.

When Individuals Disagree With Wage and Employment Information Obtained 
From a Payroll Data Provider

    As noted above, wage and employment information may affect OASDI 
disability entitlement, SSI eligibility, and SSI payment amounts 
because we use that information to determine or decide who can receive 
benefits and the amount of the SSI payments for eligible individuals. 
If we implement the information exchange, we would obtain the payroll 
data from the previous month on or around the 7th day of the current 
month. For example, on November 7, 2023, we would receive the wage and 
employment information for October 2023. If our use of wage and 
employment information from a payroll data provider affects 
entitlement, eligibility, or payment amounts, all of our usual 
procedures apply.\56\ By receiving this information early in a month 
for SSI cases, we should have enough time to calculate the correct 
payment, send an advance notice or Notice of Planned Action (NOPA) when 
an adverse action applies, and adjust benefits accurately for the 
following month (December 2023 in this example).\57\
---------------------------------------------------------------------------

    \56\ As described in this and subsequent paragraphs, we will 
provide adequate notice to beneficiaries before adversely adjusting 
their benefits. However, we do not undertake any specialized review 
of payroll data to identify potential aberrations or other 
indicators that a reported income may be particularly unlikely to be 
accurate.
    \57\ We note that the monthly information exchange only provides 
us data for the previous month but does not provide any updates to 
revisions made for earlier months. For example, if during the May 
7th, 2024 information exchange we received information that a 
beneficiary earned $500 in April, but during the month of May the 
employer corrected that amount in their own payroll system to $800, 
the June 7th, 2024 information exchange would not alert us to the 
change in reported income for April.
---------------------------------------------------------------------------

    For OASDI disability, we send a notice to the beneficiary before 
taking an adverse action (e.g., reduction, suspension, or termination 
of benefits) if we learned of the reason for the action from a source 
other than a first party report. We call this an advance notice. Once 
we issue the advance notice, the beneficiary has 15 days or 35 days to 
rebut the information in the advance notice before the adverse action 
will

[[Page 11780]]

occur.\58\ If we do not hear from the beneficiary within the timeframe, 
we assume the information in the advance notice is correct and we will 
take the adverse action. When we take the adverse action, the 
beneficiary will receive a final (initial determination) notice,\59\ 
which provides the beneficiary with the right to appeal the action 
taken.
---------------------------------------------------------------------------

    \58\ The time frame for rebuttal is 15 days for cases that 
involve adverse actions or adjustments that do not involve an 
automated computer or non-automated data match and 35 days for cases 
that involve automated computer or non-automated data match. See 
POMS GN 03001.015. Individuals whose wage and employment information 
is received through an information exchange will have 35 days to 
rebut the information.
    \59\ Initial determinations are the determinations we make that 
are subject to administrative and judicial review. We base our 
initial determination on the preponderance of the evidence. We state 
the important facts and give the reasons for our conclusions in the 
initial determination. See 20 CFR 404.902, 20 CFR 404.900, 20 CFR 
416.1402, and 20 CFR 416.1400. We mail a written notice of our 
initial determination to them at their last known address. The 
written notice will explain in simple and clear language what we 
have determined and the reasons for and the effect of our 
determination. If our determination involves a determination of 
disability that is in whole or in part unfavorable to them, our 
written notice also will contain in understandable language a 
statement of the case setting forth the evidence on which our 
determination is based. The notice also will inform them of their 
right to reconsideration. We will not mail a notice if the 
beneficiary's entitlement to benefits has ended because of their 
death. See 20 CFR 404.904 and 20 CFR 416.1404. Initial 
determinations may be appealed within 60 days (or longer with good 
cause). See 20 CFR 404.909, 20 CFR 404.901, 20 CFR 416.1409, and 20 
CFR 416.1401. To appeal an initial determination, an individual may 
file an SSA-561-U2 Reconsideration Request available at: https://www.ssa.gov/forms/ssa-561-u2.pdf. To appeal a Reconsideration 
Determination, an individual can file an HA-501-U5 Request for 
Hearing by Administrative Law Judge available at https://www.ssa.gov/forms/ha-501.pdf. To appeal a hearing decision, an 
individual can file an HA-520 Request for Review of Hearing 
Decision/Order available at https://www.ssa.gov/forms/ha-520.html. 
To appeal an Appeals Council Decision or if the Appeals Council 
denies review of the hearing decision, an individual can file an 
action in Federal District Court. The SSA-561-U2, HA-501-U5, and HA-
520 can be completed and submitted online via the Non-Medical Appeal 
Page available at https://secure.ssa.gov/iApplNMD/start.

                            OASDI Disability
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Estimated Date by Which Information      For adverse actions that do not
 Must Be Received for an Adverse Action.  involve an automated computer
                                          or non-automated data match:
                                          At least 15 days in advance.
                                         For adverse actions that
                                          involve an automated computer
                                          or non-automated data match:
                                          At least 35 days in advance.
                                         Note: Individuals whose wage
                                          and employment information is
                                          received through an
                                          information exchange will have
                                          35 days to rebut the
                                          information.
------------------------------------------------------------------------

    For SSI, we send a NOPA to the beneficiary before taking an adverse 
action (e.g., reduction, suspension, or termination of benefits). This 
NOPA, also referred to as a Goldberg Kelly (GK) notice, is a written 
notice of proposed adverse action. The notice includes the basis for 
the adverse action and an explanation of appeal rights. It allows a 
recipient the necessary time to appeal the planned action and continue 
to receive unreduced benefits pending a determination on the appeal. 
After receiving the NOPA, the individual has 60 days to file an appeal. 
If an appeal is filed within 60 days, the recipient will receive, 
unless waived, continued, or reinstated SSI payments until we make a 
determination at the reconsideration level.\60\
---------------------------------------------------------------------------

    \60\ 20 CFR 416.1336(b) and EM 21064REV.
---------------------------------------------------------------------------

    Because we must provide a NOPA before reducing or terminating 
benefits, we will only take an adverse action if we receive information 
leading to that action at least 15 days before the first day of the 
adverse action month. This allows time for mailing and for the 
individual to respond. If there is insufficient time remaining in the 
month to accommodate the NOPA procedures, we will not take the adverse 
action until the following month. For example, if we received 
information adversely affecting ongoing benefits on March 26, 2024, we 
would send a NOPA that notifies the recipient of the adverse action 
that will occur in May 2024. The first month we could reduce or 
terminate benefits would be May 2024.\61\ Because the wage and 
employment information from the information exchange is always 
requested for the prior month, the pay period cycle (i.e., the date the 
individual receives payment) has a minimal effect on the information 
exchange.
---------------------------------------------------------------------------

    \61\ POMS SI 02301.301.

                                   SSI
------------------------------------------------------------------------
 
------------------------------------------------------------------------
Estimated Date by Which Earnings Must    For adverse actions: At least
 Be Received for an Adverse Action.       15 days before the first day
                                          of the adverse action month.
------------------------------------------------------------------------

    As noted above, our usual procedures apply. This includes our 
procedures for seeking review of an initial determination and any 
related procedures. Our administrative review process is described in 
existing regulations Sec.  404.900 for OASDI disability and Sec.  
416.1400 for SSI. As in any other case, the process consists of several 
administrative review steps which generally must be completed within 
certain time periods, and in the following order: (1) initial 
determination, (2) reconsideration, (3) hearing held by an 
administrative law judge, and (4) Appeals Council review.\62\ An 
individual who is dissatisfied with our final decision may seek 
judicial review.\63\
---------------------------------------------------------------------------

    \62\ See subpart J of 20 CFR 404 and subpart N of 20 CFR 416.
    \63\ See section 205(g) of the Act, 42 U.S.C. 405(g).
---------------------------------------------------------------------------

    A claimant, recipient, beneficiary, or deemor may present us with 
evidence such as pay stubs or we may send requests to their employers 
for this information, if the individual believes our information is not 
correct.\64\ We will consider all evidence submitted and use it to 
determine the appropriate action for the individual's record. We will 
prioritize pay stubs over payroll data provider information in 
situations in which the individual questions the wage and employment 
information we receive from payroll data providers through an 
information exchange. We have longstanding policies for resolving 
discrepancies in wage evidence, which we would leverage. Individuals 
are

[[Page 11781]]

generally responsible for providing evidence to us, but if a situation 
arises in which it is difficult for them to obtain evidence, we may 
assist them. Our policies direct technicians to use other acceptable 
evidence of wages when discrepancies are present, and to document the 
discrepancy, resolution, and associated evidence. If a technician 
determines based on acceptable evidence that the earnings do not belong 
to the individual, those earnings will be removed and will not affect 
SSI eligibility or payment determinations.
---------------------------------------------------------------------------

    \64\ Section 824 of the BBA allows us to treat the wage and 
employment information we receive from the from a payroll data 
provider through the information exchange as verified and does not 
require additional verification.
---------------------------------------------------------------------------

    In addition, if an individual is not satisfied with the wage and 
employment information we are receiving from payroll data providers 
through an information exchange, they have the option to revoke 
authorization at any time.
    Finally, we are requesting public input on expanding the methods 
which are available under our regulations to initiate a reconsideration 
(which is the first step of appealing an adverse decision). We do not 
intend to make any changes to the appeals filing process at this time, 
but we will consider public input for future rulemaking. One such 
option would be removing the requirement that reconsideration requests 
must be ``written.'' Under our current regulations, a request for 
reconsideration can only be made as a ``written request'' (see 20 CFR 
404.909(a) and 20 CFR 416.1409(a)). As a result, if an individual 
participating in the payroll exchange receives an advanced notice or 
NOPA indicating that their benefits may be reduced, they do not have 
the option of calling our 800 number or a field office to initiate the 
process of requesting a reconsideration (currently, available options 
for initiating a reconsideration request including completing and 
mailing paper form SSA-561, visiting a field office and completing an 
SSA-561 in-person, or completing the i561 through www.ssa.gov). This 
alternative would allow individuals, if they desired, to submit a 
request by calling us (which may be the preferred option for many of 
our beneficiaries). As discussed in the Solicitation for Public comment 
section below, we seek comments on if this would lower burdens for our 
beneficiaries as well as whether we should consider any other 
consequences of this alternative.

Summary of Changes

    In Sec.  404.702 and Sec.  416.702, we propose to add definitions 
for ``Participating payroll data provider'' and ``Payroll data 
provider.''
    In Sec.  404.703, we propose to designate the existing text as 
paragraph (a) and add paragraph (b) to explain that we will ask 
individuals for written authorization so that we can obtain their wage 
and employment information from a payroll data provider when they apply 
for or become entitled to monthly insurance benefits. We will also 
explain the scope and duration of the authorization and how we will use 
it.
    In Sec.  404.1588, we propose to clarify in paragraph (a) that an 
individual must report if they have a new employer. This clarification 
will more effectively cover the situation where an individual starts a 
new job, rather than requiring individuals to report all increased work 
when reduced reporting applies. We also propose to add a new paragraph 
(b) to explain OASDI disability reporting obligations when individuals 
authorize us to obtain their wage and employment information from 
payroll data providers. Proposed Sec.  404.1588(b) explains that if we 
have the authorization described in Sec.  404.703, we will reduce 
reporting responsibilities if we receive the individuals' wage and 
employment information from their employer(s) through a participating 
payroll data provider, but only for that employer(s). We will notify 
individuals in writing whenever there is a change in their reporting 
responsibilities related to the authorization, or when they may be 
subject to certain penalties. However, the OASDI disability beneficiary 
will always have to report when their condition improves, when they 
return to work, and when they have a new employer.
    We also explain that individuals may revoke their authorization in 
writing at any time and that if they do, we will apply the revocation 
to all pending or approved disability claims under OASDI and all 
pending or approved claims under SSI from the time we process the 
revocation. If they revoke their authorizations, they will be subject 
to all reporting responsibilities and possible penalties. Also, we 
removed references to the centralized computer file from redesignated 
paragraph (c) because these references were outdated.\65\
---------------------------------------------------------------------------

    \65\ We are proposing to remove outdated language in this 
section and in Sec.  416.709 (discussed below) explaining that the 
establishment of a centralized computer file may cause us to stop 
issuing receipts under certain circumstances. Because we do not use 
the centralized computer file described in the regulations, we are 
removing references to it. We will continue to issue receipts 
whenever we get information about the changes described in this 
section or in earned income described in Sec.  416.709.
---------------------------------------------------------------------------

    We propose to revise Sec.  416.701 to explain that subpart G 
discusses what events individuals must report to us. We inform 
individuals what their reports must include, when reports are due, and 
when certain reporting requirements and penalties relating to reporting 
requirements do not apply.
    We propose to revise Sec.  416.708 to explain that individuals must 
report any increase or decrease in their income and any increase or 
decrease in the income of certain other individuals, unless the 
circumstances in Sec.  416.709(a) and (c) apply. Those circumstances 
are:
    <bullet> they authorize us to obtain information from a payroll 
data provider; and
    <bullet> we receive their wage and employment information from 
their employer(s) through a participating payroll data provider.
    Also, we removed references to the centralized computer file from 
paragraph (c) because these references were outdated.\66\
---------------------------------------------------------------------------

    \66\ Id.
---------------------------------------------------------------------------

    We propose to add a new section, Sec.  416.709, to explain the 
potential for reduced reporting responsibilities for SSI when an 
individual authorizes us to obtain wage and employment information from 
payroll data providers through an information exchange. As proposed, 
Sec.  416.709(a) explains that we will ask individuals for written 
authorization to obtain wage and employment information about them from 
a payroll data provider whenever we determine the information is needed 
in connection with a determination of initial or ongoing eligibility 
for SSI benefits. We further explain the scope and duration of the 
authorization, and when reporting requirements change in proposed 
paragraphs (b) and (c) of Sec.  416.709. Reporting responsibilities 
will change based on whether we receive an individual's wage and 
employment information from their employer(s) through a participating 
payroll data provider. If we receive wage and employment information 
from an individual's employer(s) through a participating payroll data 
provider, they will not have to report changes in their wages paid in 
cash from that employer(s) only. However, the individual will have to 
comply with all other reporting requirements.
    In proposed paragraph (c) in Sec.  416.709, we also explain that 
when we inform individuals about changes in their reporting 
responsibilities, we will also inform them whether they may be subject 
to certain penalties, and when and how they may revoke their 
authorization.
    We propose to revise Sec.  416.988 to explain that, if we receive 
wage and employment information from an individual's employer(s) 
through a participating payroll data provider, they

[[Page 11782]]

will not have to report an increase in the amount of work or an 
earnings increase from that employer(s) only. As with Sec.  404.1588, 
we have clarified that an individual must report a new employer. This 
clarification will more effectively cover the situation where an 
individual starts a new job, rather than requiring individuals to 
report all increased work when reduced reporting applies.
    We also propose to add a new section, Sec.  422.150, to explain our 
guidelines for establishing and maintaining an information exchange 
with payroll data providers. We will identify and review payroll data 
providers to determine their ability to engage in an information 
exchange with us. We also explain that consistent with applicable law 
and regulations, we will establish an information exchange with the 
selected payroll data provider. Proposed Sec.  422.150(a) also explains 
the requirements for an information exchange, and that we will publish 
a notice in the Federal Register describing the information exchange 
and other factors before we receive and use information from a payroll 
data provider. Finally, proposed Sec.  422.150(b) explains that we will 
periodically assess whether the data we receive under an information 
exchange continues to be accurate, complete, and up-to-date, and 
monitor compliance with the requirements of the information exchange.

Solicitation for Public Comment

    As discussed elsewhere in this NPRM, we are seeking public comment. 
Questions that interested parties may wish to consider when evaluating 
this proposed rule:
    1. If we receive someone's wage and employment information through 
the payroll exchange, should we treat any overpayments which result 
from inaccurate reporting of their wage and employment information by 
their employer or the payroll data provider as an overpayment which the 
individual was ``without fault'' in causing? Would this lower burdens 
for our beneficiaries or improve administrative efficiencies, are there 
other improvements we might consider related to addressing overpayments 
associated with workers who participate in the payroll exchange, or are 
there any other consequences that we should consider?
    2. Should we revise our regulations to remove the requirement that 
reconsideration be received only via ``written request'' to accommodate 
the ability to receive reconsideration requests via the phone? Would 
this lower burden for beneficiaries and are there any other 
consequences that we should consider?

Rulemaking Analyses and Notices

Clarity of These Rules

    Executive Order (E.O.) 12866 as supplemented by E.O. 13563 and 
amended by E.O. 14094 require each agency to write all rules in plain 
language. In addition to your substantive comments on this NPRM, we 
invite your comments on how to make rules easier to understand.
    For example:
    <bullet> Would more, but shorter, sections be better?
    <bullet> Are the requirements in the rule clearly stated?
    <bullet> Have we organized the material to suit your needs?
    <bullet> Could we improve clarity by adding tables, lists, or 
diagrams?
    <bullet> What else could we do to make the rule easier to 
understand?
    <bullet> Does the rule contain technical language or jargon that is 
not clear?
    <bullet> Would a different format make the rule easier to 
understand, e.g., grouping and order of sections, use of headings, 
paragraphing?

Regulatory Procedures

E.O. 12866 as Supplemented by E.O. 13563 and Amended by E.O. 14094

    We consulted with the Office of Management and Budget (OMB) and OMB 
has determined that this proposed rule meets the criteria for a Section 
3(f)(1) significant regulatory action under E.O. 12866, as supplemented 
by E.O. 13563 and amended by E.O. 14094 and is subject to OMB review.

Assumptions

    We estimate that, by 2033, 96% of SSI recipients will have 
authorized us to obtain this information from payroll data providers 
through information exchanges, and about 60% of disabled OASDI 
beneficiaries will have also provided this authorization. We base this 
estimate on current rates of adoption as we have sought authorization 
from beneficiaries during both new enrollment and disability review 
processes since late 2017. Since 2017, 98% of OASDI disability 
beneficiaries and SSI recipients who have been asked have provided 
authorization--this corresponds to about 25% of all current OASDI 
disability beneficiaries as of May 2023. As of July 2022, 56% of all 
current SSI recipients and 67% of SSI deemors have provided 
authorization.\67\
---------------------------------------------------------------------------

    \67\ We do not know why SSI deemors have provided authorization 
at a higher rate than beneficiaries.
---------------------------------------------------------------------------

    We estimate that there are about 1,100,000 OASDI disability 
beneficiaries, between 200,000 and 300,000 SSI recipients, and another 
500,000 to 600,000 deemors of SSI recipients who work in a given year. 
Because employers representing approximately two-thirds of the non-farm 
payroll of employees will automatically provide payroll data to us, we 
expect individuals will submit fewer wage reports.\68\
---------------------------------------------------------------------------

    \68\ As stated in the preamble, neither SSA nor Equifax has 
analyzed whether working disability benefit recipients are 
represented in a similar proportion in the database, but we assume 
it for the purposes of this analysis.
---------------------------------------------------------------------------

    Additionally, we estimate that there are 100,000 OASDI disability 
beneficiaries who are overpaid due to working at or above the SGA 
level. Over FYs 2018 through 2022, these individuals were overpaid an 
annual average of $1,163 million. We estimate that, through the 
information exchange, we will be able to identify both wages we 
otherwise would not have known about, as well as wages that will be 
identified timelier than under current processes. Additionally, we 
estimate that we will identify and assess approximately an additional 
10% of overpayments due to working at or above SGA (OASDI) or having 
wages from employment (SSI) which we never would have identified 
through our current processes.\69\
---------------------------------------------------------------------------

    \69\ We do not have data to specifically support the assumption 
that we will identify 10% more overpayments. However, we do know 
certain small overpayments may be currently overlooked through our 
current systems. Through review processes such as the Master 
Earnings File, SSA is generally able to identify overpayments from 
unreported wage changes at least on an annual basis. In certain 
circumstances, however, annual earnings as identified on the Master 
Earnings File or on a quarterly match may be below the threshold for 
identifying an overpayment even though the beneficiary's monthly 
earnings in certain months would have resulted in changes to the 
amount they were owed. For example, if an OASDI disability 
beneficiary worked at $50 above SGA for 11 months of the year, and 
worked $0 in the 12th month, they would generally be passed over in 
the annual match because their total annual wages would be below 12 
times SGA. Having the monthly data would give SSA more exact 
information and the agency would be able to compare on a monthly 
basis whether earnings exceeds SGA. As another example, certain de 
minimis changes in benefit payment rates due to changes in income 
may not be assessed under current policy because of required efforts 
under current processes; because these processes will be automated 
through PIE, these changes will be made in a timely manner.
---------------------------------------------------------------------------

Anticipated Costs to the Public

    There are minor costs to the public associated with this 
rulemaking. Individuals who apply for or are receiving OASDI 
disability, individuals who apply for or are receiving SSI, and SSI 
deemors, will need to spend a

[[Page 11783]]

minimal amount of time to complete the authorization to allow us to 
obtain wage and employment information from payroll data providers 
through an information exchange. Similarly, individuals who want to 
revoke their authorizations would need to spend a minimal amount of 
time to do so. We anticipate this time would be more than offset by the 
time saved by individuals who would no longer need to spend time 
reporting certain wage and employment information and work activity.
    There is a potential for lost benefits to the beneficiary or 
recipient in instances where we make an unfavorable or partially 
favorable determination or decision based on potentially inaccurate 
information obtained from payroll data providers through an information 
exchange. We have not estimated at this time the number of additional 
NOPAs which might be due to inaccurate payroll information.
    There is a potential burden on the public to correct any inaccurate 
data reported to us from a payroll data provider if an individual 
identifies an error in the information we receive through an 
information exchange. However, the primary burden related to these 
rules is the time it would take for the individual to correct 
information with us. Additionally, although individuals can give us 
information that we may use to correct our records, they may also have 
to work with the payroll data provider directly to correct any 
inaccurate data in its records, because we can only update our 
records.\70\
---------------------------------------------------------------------------

    \70\ When an individual believes the information we are 
receiving from a payroll data provider is incorrect, they can 
correct the information with us. A beneficiary may also wish to 
contact the payroll data provider to resolve a recurring issue or 
if, for example, they believe the error may be due to potential 
fraud. We will provide information in the advance notice (for OASDI 
disability) or NOPA (for SSI) for how to contact the payroll data 
provider directly.
---------------------------------------------------------------------------

    We anticipate minimal costs to the public associated with reporting 
inaccurate data based on the accuracy rate recorded in the accuracy 
analysis study previously discussed and included in the rulemaking 
record.

Anticipated Benefit to the Public

    An information exchange has many benefits. Individuals will have 
reduced wage reporting responsibilities if they provide us with 
authorization to obtain their wage and employment information from a 
payroll data provider and we obtain that information from a 
participating payroll data provider through an information exchange. 
Reducing reporting responsibilities relieves the burden placed on 
individuals to report certain wage and employment information to us if 
we are already receiving it from a payroll data provider through an 
information exchange. This reduced reporting responsibility should make 
it easier for individuals to comply with our wage reporting rules. It 
reduces the individual's need to report certain wage and employment 
information to us which includes the burden of the time it takes the 
individual to report this information and the burden of remembering to 
report it to us within a certain timeframe.
    The timely receipt of wage and employment information from a 
payroll data provider through an information exchange would also help 
us reduce improper payments, which may be a source of confusion for the 
public and may cause individuals to spend time addressing errors 
associated with improper payments or filing appeals or waiver requests. 
Lastly, authorizing us to obtain records from a payroll data provider 
through an information exchange may relieve individuals from certain 
penalties under section 1129A of the Act for any omission or error with 
respect to wages reported to us by a participating payroll data 
provider. And for SSI, we will find good cause for a failure or delay 
in reporting a change in employer, which can avoid certain additional 
penalties.

Anticipated Transfers to Our Program

    Our Office of the Chief Actuary estimates that implementation of 
this proposed rule would result in a total net reduction in OASDI 
benefit payments of $1.8 billion and a total net reduction in Federal 
SSI payments of $1.9 billion over fiscal years 2024 through 2033. The 
estimates assume implementation of this rule on October 1, 2023, and 
that SSA will not, during the estimate period, contract with any other 
payroll data provider beyond Equifax. We note that the increase in the 
amount of overpayments identified or prevented in this period would be 
larger than the reduction in actual benefits paid in this period. 
First, regarding overpayments newly identified, as discussed in our 
Assumptions section, these estimates assume that 50 percent of work-
related overpayments identified for OASDI beneficiaries and 80 percent 
of earned-income related overpayments for SSI recipients will be 
recovered within 10 years after they are identified. Thus, much of the 
overpayments newly identified, especially those identified late in this 
10-year period, will be only partially recovered with subsequent 
reductions in payments through fiscal year 2033. Second, while 
potential overpayments that would be prevented due to implementation of 
this rule will immediately reduce benefit payments, such early 
identification of earnings will also avoid subsequent potential 
overpayments through fiscal year 2033 and beyond.

Anticipated Administrative Costs to the Social Security Administration

    The Office of Budget, Finance, and Management estimates that this 
proposal will result in a net administrative cost of $419 million for 
the 10-year period from FY 2024 to FY 2033. The net administrative cost 
is mainly a result of the contract and IT costs to administer the 
information exchange. The total costs are offset by some administrative 
savings from a shorter wage development process in affected cases 
during title XVI (SSI) pre-effectuation reviews, redeterminations, 
post-eligibility actions, and overpayments, as well as during title II 
(OASDI) work continuing disability reviews. However, we do not attempt 
to estimate these time savings. As explained above, under our current 
process, we sometimes conduct a manual query to request records from 
payroll data providers or employers. We estimate we would save 
approximately 20 minutes of our staff's time each time we no longer 
need to complete this query.\71\
---------------------------------------------------------------------------

    \71\ We note these savings are for our staff. They do not 
represent public reporting burden savings.
---------------------------------------------------------------------------

Executive Order 13132 (Federalism)

    We analyzed this proposed rule in accordance with the principles 
and criteria established by Executive Order 13132 and determined that 
the proposed rule will not have sufficient Federalism implications to 
warrant the preparation of a Federalism assessment. We also determined 
that this proposed rule will not preempt any State law or State 
regulation or affect the States' abilities to discharge traditional 
State governmental functions.

Regulatory Flexibility Act

    We certify that these proposed rules will not have a significant 
economic impact on a substantial number of small entities because it 
primarily affects individuals. In some instances, this proposed change 
may reduce the burden on employers because we may need to contact 
employers for information less frequently when we receive wage and 
employment information from payroll data providers through an 
information exchange. Because our contact with employers for this 
reason is limited now, we do not expect a significant

[[Page 11784]]

difference. Therefore, a regulatory flexibility analysis is not 
required under the Regulatory Flexibility Act, as amended. We discuss 
the time burden savings for employers stemming from this proposed rule 
in the Paperwork Reduction Act section of the preamble.

Paperwork Reduction Act Statement

    SSA already has existing OMB-approved information collection tools 
relating to this proposed rule: the Letter to Employer Requesting 
Information About Wages Earned by Beneficiary (SSA-L725, OMB Control 
No. 0960-0034); Letter to Employer Requesting Wage Information (SSA-
L4201, OMB Control No. 0960-0138); Monthly SSI Wage Reporting (SSA's 
Mobile Wage Reporting, Telephone Wage Reporting, and Internet myWage 
Report application, OMB Control No. 0960-0715); the Authorization for 
the Social Security Administration to Obtain Wage and Employment 
Information from Payroll Data Providers (Form SSA-8240, OMB Control No. 
0960-0807); and the Notice to Electronic Information Exchange Partners 
to Provide Contractor List (SSA-731, OMB Control No. 0960-0820). While 
we previously obtained OMB approval for the new form (under OMB Control 
No. 0960-0807) to collect the authorization for the wage and employment 
information from payroll data providers, SSA has not utilized this 
information through an automated information exchange, because those 
exchanges have not yet gone live. The proposed rule provides additional 
information on OASDI and SSI reduced reporting requirements, as well as 
the effects of beneficiaries, recipients, and deemors authorizing us to 
obtain records from payroll data providers. In addition, the proposed 
rule describes the establishment of the requirements to enter into an 
information exchange with payroll data providers. SSA established the 
information collection for the Authorization for the Social Security 
Administration to Obtain Wage and Employment Information from Payroll 
Data Providers (0960-0807) prior to the creation of this new rule. We 
will include the appropriate CFR citations under that OMB approved 
information collection upon publication of the final rule. In addition, 
we will obtain OMB approval for revisions to the collection instruments 
as needed simultaneously with the publication of the final rule. 
Finally, the implementation of this proposed rule would decrease the 
time burden for the public, as it would remove the need for individuals 
or employers to submit wages to SSA when we receive them from payroll 
data providers through an information exchange instead. While we 
acknowledge that there is a burden on the public for 20 CFR 
422.150(a)(3), we did not include it in the chart below because fewer 
than 10 providers submit this information to SSA. The following chart 
shows the anticipated burden reduction due to the other regulatory 
requirements from this proposed rule:

 
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                     Anticipated   Anticipated   Anticipated
                                                                            Current      Current     new  number   new burden     estimated    Estimated
                                                Number of     Frequency     average     estimated        of       per response  total burden    burden
        OMB #; form #; CFR citations           respondents   of response   burden per     total      respondents      under         under       savings
                                                                            response      burden        under      regulation    regulation     (hours)
                                                                           (minutes)     (hours)     regulation     (minutes)      (hours)
--------------------------------------------------------------------------------------------------------------------------------------------------------
0960-0034--SSA-L725........................         170,000            1           40      113,333       170,000            40       113,333         * 0
0960-0138--SSA-L4201.......................         133,000            1           30       66,500       133,000            30        66,500         * 0
0960-0715--Mobile Wage reporting,                    88,382           12            6      106,058        36,237             6        43,484      62,574
 404.703(a), 416.708(c), 416.709 (new).....
0960-0715--Telephone Wage reporting,                 16,341           12            5       16,341         6,700             5         6,700       9,641
 404.703(a), 416.708(c), 416.709 (new).....
0960-0715--myWage Report, 404.703(a),                 3,557           12            7        4,980         1,458             7         2,041    ** 2,939
 416.708(c), 416.709 (new).................
0960-0807--SSA-8240, 404.703(b),                    150,000            1            8       20,000       150,000             8        20,000         * 0
 404.1588(a), 404.1588(b)(3)(iii),
 404.1588(b)(4), 416.988(a)................
0960-0807--MCS/SSI Claim System,                    697,580            1            3       34,879       697,580             3        34,879         * 0
 404.703(b), 404.1588(a),
 404.1588(b)(3)(iii), 404.1588(b)(4),
 416.988(a)................................
0960-0807--Internet, 404.703(b),                    147,820            1            3        7,391       147,820             3         7,391         * 0
 404.1588(a), 404.1588(b)(3)(iii),
 404.1588(b)(4), 416.988(a)................
                                            ------------------------------------------------------------------------------------------------------------
    Totals.................................       1,406,680  ...........  ...........      369,482     1,342,795  ............       294,328      75,154
--------------------------------------------------------------------------------------------------------------------------------------------------------
* These proposed rules will not significantly affect the burden for this information collection; therefore, we do not anticipate any burden reduction
  for this information collection due to the implementation of this rule.
** SSA is providing this figure as a current best estimate for burden reduction under these proposed rules. We will not have accurate data until we
  implement the rule.

    The following chart shows the reduction in theoretical cost burdens 
associated with the proposed rule:


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                                                              Average
                                                                             Estimated      Anticipated       Average     combined  wait    Anticipated
                                                            Anticipated     burden  per      estimated      theoretical   time in  field      annual
              OMB #; form #; CFR citations                 new number of  response  from   total burden     hourly cost   office  and/or    opportunity
                                                            respondents    chart  above        under          amount        teleservice   cost (dollars)
                                                                             (minutes)      regulation      (dollars) *       centers           ***
                                                                                              (hours)                      (minutes) **
--------------------------------------------------------------------------------------------------------------------------------------------------------
0960-0034--SSA-L725.....................................         170,000              40         113,333        * $25.14               0  *** $2,849,192
0960-0138--SSA-L4201....................................         133,000              30          66,500         * 25.14               0   *** 1,671,810
0960-0715--Mobile Wage reporting, 404.703(a),                     36,237               6          43,484         * 21.29               0     *** 925,774
 416.708(c), 416.709 (new)..............................

[[Page 11785]]

 
0960-0715--Telephone Wage reporting, 404.703(a),                   6,700               5           6,700         * 21.29               0     *** 142,643
 416.708(c), 416.709 (new)..............................
0960-0715--myWage Report, 404.703(a), 416.708(c),                  1,458               7           2,041         * 21.29               0      *** 43,453
 416.709 (new)..........................................
0960-0807--SSA-8240, 404.703(b), 404.1588(a),                    150,000               8          20,000         * 21.29           ** 24   *** 1,703,200
 404.1588(b)(3)(iii), 404.1588(b)(4), 416.988(a)........
0960-0807--MCS/SSI Claim System, 404.703(b),                     697,580               3          34,879         * 21.29           ** 21   *** 5,940,591
 404.1588(a), 404.1588(b)(3)(iii), 404.1588(b)(4),
 416.988(a).............................................
0960-0807--Internet, 404.703(b), 404.1588(a),                    147,820               3           7,391         * 21.29           ** 21   *** 1,258,835
 404.1588(b)(3)(iii), 404.1588(b)(4), 416.988(a)........
                                                         -----------------------------------------------------------------------------------------------
    Totals..............................................       1,342,795  ..............         294,328  ..............  ..............  *** 14,535,498
--------------------------------------------------------------------------------------------------------------------------------------------------------
* We based this figure on the average Payroll and Timekeeping Clerks hourly salary, as reported by the Bureau of Labor Statistics data (https://www.bls.gov/oes/current/oes433051.htm); as well as the averaging of SSDI payments based on SSA's current FY 2023 data (https://www.ssa.gov/legislation/2023factsheet.pdf) and the average U.S. citizen's hourly salary, as reported by Bureau of Labor Statistics data (https://www.bls.gov/oes/current/oes_nat.htm).
** We based this figure on the average FY 2023 wait times for field offices and hearings office, as well as by averaging both the average FY 2023 wait
  times for field offices and teleservice centers, based on SSA's current management information data.
*** This figure does not represent actual costs that SSA is imposing on recipients of Social Security payments to complete this application; rather,
  these are theoretical opportunity costs for the additional time respondents will spend to complete the application. There is no actual charge to
  respondents to complete the application.

    SSA submitted a single new Information Collection Request which 
encompasses revisions to information collections currently under OMB 
Numbers 0960-0034, 0960-0138, 0960-0715, 0960-0807) to OMB for the 
approval of the changes due to the proposed rule. After approval at the 
final rule stage, we will adjust the figures associated with the 
current OMB numbers for these forms to reflect the new burden. We are 
soliciting comments on the burden estimate; the need for the 
information; its practical utility; ways to enhance its quality, 
utility, and clarity; and ways to minimize the burden on respondents, 
including the use of automated techniques or other forms of information 
technology. In addition, we are specifically seeking comment on whether 
you have any questions or suggestions for edits to the forms referenced 
above in the context of this proposed regulatory change. If you would 
like to submit comments, please send them to the following locations:

Office of Management and Budget, Attn: Desk Officer for SSA, Fax 
Number: 202-395-6974
Social Security Administration, OLCA, Attn: Reports Clearance Director, 
Mail Stop 3253 Altmeyer, 6401 Security Blvd., Baltimore, MD 21235, Fax: 
410-966-2830, Email address: <a href="/cdn-cgi/l/email-protection#88c7daa6daedf8e7fafcfba6cbe4ede9fae9e6ebedc8fbfbe9a6efe7fe"><span class="__cf_email__" data-cfemail="7d322f532f180d120f090e533e11181c0f1c131e183d0e0e1c531a120b">[email protected]</span></a>

    You can submit comments until April 15, 2024, which is 60 days 
after the publication of this notice. To receive a copy of the OMB 
clearance package, contact the SSA Reports Clearance Officer using any 
of the above contact methods. We prefer to receive comments by email or 
fax.
(Catalog of Federal Domestic Assistance Program Nos. 96.001, Social 
Security--Disability Insurance; 96.002, Social Security--Retirement 
Insurance; 96.004, Social Security--Survivors Insurance; and 96.006, 
Supplemental Security Income)

List of Subjects

20 CFR Part 404

    Administrative practice and procedure; Blind; Disability benefits; 
Old-Age, Survivors, and Disability Insurance; Reporting and 
recordkeeping requirements; Social Security.

20 CFR Part 416

    Administrative practice and procedure; Aged, Blind, Disability 
benefits, Public Assistance programs; Reporting and recordkeeping 
requirements; Supplemental Security Income (SSI).

20 CFR Part 422

    Administrative practice and procedure; Organization and functions 
(Government agencies); Operational effectiveness; Social Security.

    The Commissioner of Social Security, Martin O'Malley, having 
reviewed and approved this document, is delegating the authority to 
electronically sign this document to Faye I. Lipsky, who is the primary 
Federal Register Liaison for SSA, for purposes of publication in the 
Federal Register.

Faye I. Lipsky,
Federal Register Liaison, Office of Legislation and Congressional 
Affairs, Social Security Administration.

    For the reasons set out in the preamble, we propose to amend 20 CFR 
chapter III parts 404, 416, and 422 as set forth below:

PART 404--FEDERAL OLD-AGE, SURVIVORS AND DISABILITY INSURANCE

Subpart H--Evidence

0
1. The authority citation for subpart H of part 404 is revised to read 
as follows:

    Authority:  42 U.S.C. 405(a), 902(a)(5), and 1320e-3.

0
2. Amend Sec.  404.702 by adding, in alphabetical order, the 
definitions of ``Participating payroll data provider'' and ``Payroll 
data provider'' to read as follows:


Sec.  404.702   Definitions.

* * * * *
    Participating payroll data provider means a payroll data provider 
that has established an information exchange with us to provide wage 
and employment information.
    Payroll data provider means payroll providers, wage verification 
companies, and other commercial or non-commercial entities that collect 
and maintain information regarding employment and wages.
* * * * *
0
3. Revise Sec.  404.703 to read as follows:


Sec.  404.703   When evidence is needed.

    (a) Evidence. When you apply for benefits, we will ask for evidence 
that you are eligible for them. After you become entitled to benefits, 
we may ask for evidence showing whether you continue to be entitled to 
benefits; or evidence showing whether your benefit payments should be 
reduced or stopped. See Sec.  404.401 for a list showing when benefit 
payments must be reduced or stopped.

[[Page 11786]]

    (b) Authorization to obtain data from a payroll data provider.
    (1) We will ask you for a written authorization to obtain 
information about you from a payroll data provider whenever we 
determine the information is needed in connection with a determination 
of initial or ongoing entitlement to benefits.
    (2) When we ask for your authorization, we will explain the 
authorization's scope and duration.
    (i) We will explain to you that we will use the information 
obtained from a payroll data provider when it is needed in connection 
with a determination of initial or ongoing entitlement to title II 
benefits based on disability, or for eligibility or the amount of 
benefits under the Supplemental Security Income program of title XVI of 
the Social Security Act, and to prevent improper payments. We will 
explain to you that we may also use the authorization to obtain wage 
and employment information from a payroll data provider for claims 
associated with the claim filed, such as a claim for benefits by a 
spouse or child. We will also explain that we may use and disclose your 
information consistent with applicable Federal law (see, e.g., part 401 
of this chapter) and any privacy notices we provide to you.
    (ii) We will also inform you that your authorization will remain 
effective until the earliest of one of the following occurrences: (A) 
you revoke your authorization in writing (see Sec.  404.1588(b)(4)); 
(B) we have terminated all entitlement for benefits, you have no other 
claims or appeals pending under this title, and the period for 
appealing the determination or decision terminating entitlement has 
lapsed; or (C) there has been an adverse determination or decision on 
your claim, you have no other claims or appeals pending under this 
title, and the period for appealing the adverse determination or 
decision has lapsed.

Subpart P--Determining Disability and Blindness

0
4. The authority citation for subpart P of part 404 is revised to read 
as follows:

    Authority:  42 U.S.C. 402, 405(a)-(b) and (d)-(h), 416(i), 
421(a) and (h)-(j), 422(c), 423, 425, 902(a)(5), and 1320e-3; sec. 
211(b), Pub. L. 104-193, 110 Stat. 2105, 2189; sec. 202, Pub. L. 
108-203, 118 Stat. 509 (42 U.S.C. 902 note).

0
5. Amend Sec.  404.1588 by redesignating paragraph (b) as paragraph (c) 
and adding a new paragraph (b) and revising paragraphs (a) and (c) to 
read as follows:


Sec.  404.1588   Your responsibility to tell us of events that may 
change your disability status.

    (a) Your responsibility to report changes to us. If you are 
entitled to cash benefits or to a period of disability because you are 
disabled, you should promptly tell us if--
    (1) Your condition improves;
    (2) You return to work;
    (3) You have a new employer;
    (4) You increase the amount of your work; or
    (5) Your earnings increase.
    (b) Effect of authorizing us to obtain your information from 
payroll data providers.
    (1) We will reduce your reporting responsibilities as described in 
paragraphs (a)(4) and (a)(5) of this section if we have your 
authorization to obtain wage and employment information from a payroll 
data provider (see Sec.  404.703), and we receive your wage and 
employment information from your employer(s) through a participating 
payroll data provider (see Sec.  404.702).
    (2) We will notify you in writing whenever there is a change in 
your reporting responsibilities relating to the authorization described 
in Sec.  404.703. When we tell you about changes in your reporting 
responsibilities, we will also tell you whether you may be subject to a 
penalty of nonpayment of benefits (see Sec.  404.459) related to 
information we receive from a participating payroll data provider. You 
are always required to submit any changes described in paragraphs 
(a)(1), (a)(2), and (a)(3) of this section.
    (3) When your reporting requirements will change--
    (i) If we have your authorization to obtain wage and employment 
information from a payroll data provider (see Sec.  404.703), and we 
receive your wage and employment information from your employer through 
a participating payroll data provider, you will not have to report when 
your earnings from that employer increase.
    (ii) If we have your authorization to obtain wage and employment 
information from a payroll data provider (see Sec.  404.703), but we do 
not receive your wage and employment information from your employer 
through a participating payroll data provider, we will not reduce your 
reporting responsibilities.
    (iii) If we have your authorization to obtain wage and employment 
information from a payroll data provider (see Sec.  404.703) and you 
have more than one employer,
    (A) you do not need to report when your earnings increase for an 
employer if we receive your wage and employment information for that 
employer through a participating payroll data provider, and
    (B) you must still report when your earnings increase for an 
employer if we do not receive your wage and employment information for 
that employer through a participating payroll data provider.
    (4) You may revoke your authorization at any time, but you must do 
so in writing. We will apply the revocation to all pending or approved 
disability claims under this title, as well as all pending or approved 
claims under title XVI, from the time we process your revocation. If 
you revoke your authorization, all your reporting responsibilities will 
resume, and you will again be subject to all related penalties. We will 
notify you in writing of these changes.
    (c) Our responsibility when you report your work to us. When you or 
your representative report changes in your work activity to us under 
paragraphs (a)(2), (a)(3), (a)(4), and (a)(5) of this section, we will 
issue a receipt to you or your representative.

Part 416--SUPPLEMENTAL SECURITY INCOME FOR THE AGED, BLIND, AND 
DISABLED

Subpart G--Reports Required

0
6. The authority citation for subpart G of part 416 is revised to read 
as follows:

    Authority: 42 U.S.C. 902(a)(5), 1320a-8a, 1320e-3, 1382, 1382a, 
1382b, 1382c, and 1383; sec. 211, Pub. L. 93-66, 87 Stat. 154 (42 
U.S.C. 1382 note); sec. 202, Pub. L. 108-203, 118 Stat. 509 (42 
U.S.C. 902 note).

0
7. Amend Sec.  416.701 by revising the third sentence of paragraph (a) 
to read as follows:


Sec.  416.701  Scope of subpart.

    (a) * * * This subpart tells you what events you must report; what 
your reports must include; when reports are due; and when certain 
reporting requirements, and penalties relating to reporting 
requirements, do not apply. * * *
* * * * *
0
8. Amend 416.702 by adding, in alphabetical order, the definitions of 
``Participating payroll data provider'' and ``Payroll data provider'' 
to read as follows:


Sec.  416.702   Definitions.

* * * * *
    Participating payroll data provider means a payroll data provider 
that has established an information exchange with us to provide wage 
and employment information.

[[Page 11787]]

    Payroll data provider means payroll providers, wage verification 
companies, and other commercial or non-commercial entities that collect 
and maintain information regarding employment and wages.
* * * * *
0
9. Amend Sec.  416.708 by revising paragraph (c) to read as follows:


Sec.  416.708   What you must report.

* * * * *
    (c) A change in income. Unless the circumstances in Sec.  
416.709(a) and (c) apply, you must report to us any increase or 
decrease in your income and any increase or decrease in the income of--
    (1) Your ineligible spouse who lives with you;
    (2) Your essential person;
    (3) Your parent, if you are an eligible child and your parent lives 
with you; or
    (4) An ineligible child who lives with you.

However, you need not report an increase in your Social Security 
benefits if the increase is only a cost-of-living adjustment. (For a 
complete discussion of what we consider income, see subpart K of this 
part. See Sec.  416.1323 regarding suspension because of excess 
income.) If you receive benefits based on disability, when you or your 
representative report changes in your earned income, we will issue a 
receipt to you or your representative.
* * * * *
0
10. Add Sec.  416.709 to read as follows:


Sec.  416.709   Reduced reporting requirements when you authorize us to 
obtain your information from payroll data providers.

    (a) Authorization to obtain data from a payroll data provider. We 
will ask you for written authorization to obtain information about you 
from a payroll data provider whenever we determine the information is 
needed in connection with a determination of initial or ongoing 
eligibility for benefits.
    (b) Scope and duration. When we ask for your authorization, we will 
explain the authorization's scope and duration.
    (1) We will explain to you that we will use information obtained 
from a payroll data provider, when it is needed, in connection with a 
determination of eligibility or the amount of benefits under this 
title, or for the initial or ongoing entitlement to disability benefits 
under title II of the Social Security Act, and to prevent improper 
payments. We will explain to you that we may also use the authorization 
to obtain wage and employment information from a payroll data provider 
for claims associated with the claim filed, such as an SSI claim by a 
spouse or child. We will also explain that we may use and disclose your 
information consistent with applicable Federal law (see part 401 of 
this chapter) and any privacy notices we provide to you.
    (2) We will also inform you that your authorization will remain 
effective until the earliest of one of the following occurrences: (A) 
you revoke your authorization in writing (see paragraph (c)(4) of this 
section); (B) we have terminated all eligibility for benefits and you 
have no other claims or appeals pending under this title, and the 
period for appealing the determination or decision terminating 
entitlement has lapsed; (C) there has been an adverse determination or 
decision on your claim, you have no other claims or appeals pending 
under this title, and the period for appealing the determination or 
decision terminating eligibility has lapsed; or (D) your deeming 
relationship ends.
    (c) When reporting requirements will change. We will notify you in 
writing whenever there is a change in your reporting responsibilities 
relating to the authorization described in paragraph (a) of this 
section. When we tell you about changes in your reporting 
responsibilities, we will also tell you whether you may be subject to a 
penalty of ineligibility for cash benefits (see Sec.  416.1340) related 
to information we receive from a participating payroll data provider. 
We will also tell you when we will find good cause, under section 
416.732, for a failure or delay in reporting a change in employer.
    (1) If we have your authorization to obtain wage and employment 
information from a payroll data provider as described in paragraph (a) 
of this section, and we receive your wage and employment information 
from your employer(s) through a participating payroll data provider, 
you will not have to report changes in your wages paid in cash, as 
defined in Sec.  416.1110(a), from that employer(s). Also, you will not 
have to report an increase in the amount of work from that employer or 
an increase in earnings from that employer, as described in Sec.  
416.988(a)(4) and (a)(5). All other reporting requirements still apply.
    (2) If we have your authorization to obtain wage and employment 
information from a payroll data provider as described in paragraph (a) 
of this section, but we do not receive your wage and employment 
information from your employer(s) through a participating payroll data 
provider, we will not reduce your reporting responsibilities.
    (3) If we have your authorization to obtain wage and employment 
information from a payroll data provider as described in paragraph (a) 
of this section, and you have more than one employer,
    (i) you do not need to report wages paid in cash for an employer if 
we receive your wage and employment information for that employer 
through a participating payroll data provider, and
    (ii) you must still report wages paid in cash for an employer if we 
do not receive your wage and employment information for that employer 
through a participating payroll data provider.
    (4) You may revoke your authorization at any time, but you must do 
so in writing. We will apply the revocation to all pending or approved 
claims under this title as well as all pending or approved disability 
claims under title II from the time we process your revocation. If you 
revoke your authorization, all your reporting responsibilities will 
resume; you will again be subject to all related penalties; and we may 
not find good cause, under Sec.  416.732, for a failure to report 
timely a change in employer. We will notify you in writing of these 
changes.

Subpart I--Determining Disability and Blindness

0
11. The authority citation for subpart I of part 416 is revised to read 
as follows:

    Authority:  42 U.S.C. 421(m), 902(a)(5), 1382, 1382c, 1382h, 
1383, and 1383b; secs. 4(c) and 5, 6(c)-(e), 14(a), and 15, Pub. L. 
98-460, 98 Stat. 1794, 1801, 1802, and 1808 (42 U.S.C. 421 note, 423 
note, and 1382h note).

0
12. Revise Sec.  416.988to read as follows:


Sec.  416.988  Your responsibility to tell us of events that may change 
your disability or blindness status.

    (a) If you are entitled to payments because you are disabled or 
blind, you should promptly tell us if--
    (1) Your condition improves;
    (2) You return to work;
    (3) You have a new employer;
    (4) You increase the amount of your work; or
    (5) Your earnings increase.
    (b) If we have your authorization to obtain wage and employment 
information (see Sec.  416.709(a)) from a payroll data provider (see 
Sec.  416.702), and we receive your wage and employment information 
from your employer(s) through a participating payroll data provider, 
your reporting requirements under paragraphs (a)(4) and (a)(5) will be 
reduced as described in Sec.  416.709(c).

[[Page 11788]]

PART 422--ORGANIZATION AND FUNCTIONS OF THE SOCIAL SECURITY 
ADMINISTRATION

Subpart B--General Procedures

0
13. The authority citation for subpart B of part 422 is revised to read 
as follows:

    Authority: 42 U.S.C. 405, 432, 902(a)(5), 1320b-1, 1320b-13, and 
1320e-3, and sec. 7213(a)(1)(A) of Pub. L. 108-458.

0
14. Add Sec.  422.150 to read as follows:


Sec.  422.150   Guidelines for Establishing and Maintaining an 
Information Exchange with Payroll Data Providers

    (a) Guidelines for Establishing an Information Exchange with 
Payroll Data Providers. In establishing an information exchange under 
section 1184 of the Social Security Act, we will do the following:
    (1) Identify the payroll data providers (as defined in Sec. Sec.  
404.702 and 416.702 of this chapter) that may be interested in 
participating in an information exchange with us.
    (2) Review the payroll data providers and consider factors such as: 
whether a payroll data provider is able and willing to engage in an 
information exchange; what data the payroll data provider could 
provide; whether the data from the payroll data provider is 
sufficiently accurate, complete, and up-to-date; and any conditions and 
limitations associated with our receipt of the data.
    (3) Consistent with applicable law and regulations, establish an 
information exchange with the selected payroll data provider. The 
arrangement between us and the selected payroll data provider will 
describe:
    (i) the records that will be matched;
    (ii) the procedures for the match;
    (iii) any requirements established related to accuracy, 
completeness, and up-to-date records;
    (iv) the procedures for ensuring the administrative, technical, and 
physical security of the records matched; and
    (v) such other provisions as are necessary.
    (4) Prior to receiving payroll data provider information, publish a 
notice in the Federal Register that describes the information exchange 
and the extent to which the information received through such exchange 
is:
    (i) relevant and necessary to: (A) accurately determine initial and 
ongoing entitlement to, and the amount of, disability benefits under 
title II of the Social Security Act; (B) accurately determine 
eligibility for, and the amount of, benefits under the Supplemental 
Security Income program under title XVI of the Social Security Act; and 
(C) prevent improper payments of such benefits; and
    (ii) sufficiently accurate, up-to-date, and complete.
    (b) Guidelines for Maintaining an Information Exchange with Payroll 
Data Providers. We will perform the following activities while we 
maintain an established information exchange with a payroll data 
provider described in paragraph (a):
    (1) Periodically assess whether the data we receive under the 
information exchange continues to be accurate, complete, and up-to-
date; and
    (2) Monitor compliance with the requirements of the information 
exchange described in paragraph (a)(3).

[FR Doc. 2024-02961 Filed 2-14-24; 8:45 am]
BILLING CODE 4191-02-P


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